360 Degrees Group Inc.

Strategic Intelligence: The Core of Executive Decision Making

When people first hear the term strategic intelligence (SI), they think of military or defense intelligence. Even though the roots of SI may have been with the military, the essence of SI applies to all organizations — that is, how organizations can improve their strategic decision-making process.

To help reduce this risk, executives can use structured decision-making approaches such as multicriteria decision making. Executives are typically faced with multicriteria decision making when addressing strategic decisions. The alternatives used in multicriteria decision making are often competing, and there are numerous criteria to be factored into the decision-making process. To provide some SI to senior leader decision making, human insight and gut feeling can be augmented by applying techniques to help structure one’s decision-making process. We have already highlighted the use of SWOT analysis, the balanced scorecard, scenario planning, etc., to help senior leaders better structure their decision process for making informed decisions.

One multicriteria decision-making-based approach that can be very useful to help quantify subjective judgments in decision making is the Analytic Hierarchy Process (AHP), which was developed by Thomas Saaty (University of Pittsburgh). The goal of the decision is first determined, and then criteria and subcriteria are developed, as well as various alternative solutions. A tree hierarchy is created with the goal at the top, the criteria and subcriteria in the middle, and the alternatives at the lower level. Through pairwise comparisons, the criteria are compared and weighted against each other with respect to the goal. This creates weights on the criteria that sum to one. Then, the alternatives are compared with respect to each criterion to get the weighting of the alternatives per criterion. Finally, a synthesis is made where the weights of the criteria and the weights of the alternatives per criterion are combined to get an overall weighting and ranking of the alternatives. This approach has been used by hundreds of organizations throughout the world to help them better structure their decision-making process, especially for strategic type of decisions.

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